Finding credit when your credit score is less than perfect.

It’s a fact of life that sometimes things happen that send us into a financial spiral. From relationship break ups, to vet bills and job loss, you never really know what’s around the corner. Which is why it seems particularly harsh that these problems are reflected in a credit score. Lost your job and couldn’t pay the mortgage for a couple of months until you got a new one? Had to pay moving costs and missed some credit card payments? Both of these end up on your credit score long after you’ve rectified the situation, made the payments and set things right.

Bad credit doesn’t mean bad borrower

Bad credit loans are an option for anyone who has had a few mishaps and found themselves in that uncomfortable category of having ‘a less than perfect credit score.’ Many lenders are now savvy enough to recognise that having bad credit doesn’t actually make you a bad borrower. It’s just a life event that many of us go through. That’s why bad credit loans have been created – to provide options for anyone without great credit.

Bad credit loan options

If you do find yourself with a bad credit score then there are a number of lending options to consider:

• Guarantor loans – if you have a guarantor then lenders are more willing to lend to someone with bad credit. Basically, your guarantor is the lender’s back up. If you can’t make repayments then the guarantor agrees to do it for you. The lender has a safety net and you get to borrow what you need.

• Bad Credit loans – when making a judgment about these loans, lenders don’t rely as much on your credit score as for a larger personal loan, for example. Bad credit loans are an option as long as you can prove that you have the income to make the repayment.

• Homeowner loans – if you own your own property then you have a serious asset when it comes to borrowing. Even with a bad credit score, a homeowner loan is within reach. That’s because the loan is secured against your property, so if the loan doesn’t get repaid the lender has something else to fall back on.

Bad credit isn’t permanent

It can feel like quite a damning judgment to find out that you have a bad credit score – and it can be very disappointing when that closes doors. However, it’s not a permanent state of affairs – credit scores can change very quickly. If you’re looking to improve bad credit then there are some simple steps you can take:

• Check your credit report, not just the score – find out what it is in your report that has led to the bad credit score.
• Try to repay some existing debt – this will always improve your numbers.
• Don’t repeatedly apply for credit – that will instantly impact your score.
• Make sure you don’t have black marks for no reason – you can write to old lenders and ask for these to be removed.
• Meet all your current repayments – nothing heals a credit score faster than demonstrating that you’re a good borrower.